They say higher interest rates are taking some heat off the home buying market. And it’s some good news if you’re a renter. Researchers say construction is picking back up, meaning new apartments are being built. That should bring some rental relief when you open up your next lease agreement.
However, home price appreciation hit a nationwide record of 20.6% in March 2022, a mark that the researchers say is the highest in three decades of record keeping.
If you want to afford a median-priced home, which is cited at $340,700, the household income requirement has risen to $107,500. Just last year, that number was $79,570.
When looking at the economy as a whole, the report says the surge in prices for gas, food and other necessities is really taking a hit on people and business. Plus, most pandemic emergency government support has come to a grinding halt.
The report states lower income renter households and renter households of color were disproportionately likely to fall behind on rent, stating 24% of Black renter households were behind on rent, as were 18% of Hispanic households, 18% of Asian households, and 10% of white households.
Dr. Henry McKoy, an economist and professor at North Carolina Central University, says rising interest rates are making it harder for people to buy a home.
“It’s hard. We know that traditionally, the idea of owning a home has been the foundation of the American dream,” McKoy said. “It’s becoming a lot more challenging for people to reach that dream.”
“With the current interest rate being raised by the federal reserve to try to slow down inflation, the offset of that is that [it] is makes it more expensive to buy a home for folks who couldn’t afford it anyway,” McKoy said. “The other side of affordable housing is not just the cost of housing, but also folks’ income. So, hopefully we can raise folks’ income so more people can afford to move into homes.”